Real estate insurance

Broad theft coverage limits

$200 for moneys $2500 for silverware $1500 for security $1500 water crafts and trailers and furnishings $1500 for trailers w no watercraft $1500 theft of jewelry $2500 for them of fire arms $1500 for electronic apparatus

Coinsurance formula

(amount of insurance carried divided by amount of insurance required) x (amount of loss) = (claim payment minus deductible)

Split limits

10/20/15 10,000 - per person in accident, bodily injury or death of one person in any one accident 20,000 - for bodily injury per accident subject to limit for one person per bodily injury or death of two or more persons in one accident 15,000 - property damage

Misrepresentation

A lie

Auto policy coverage sections

A- liability B- med payments C- uninsured motorist coverage D- coverage for damage to your auto E- duties after accident or loss F- general per visions

Vacant

Absence of people and personal property

Coverage E

Additional living expenses Only available to policy owners who occupy the dwellings Broad and special forms only Includes motel, dining, laundry, transportation expenses during period of repair of property for a max of 2 weeks

Rating

Age,sex,marital status, drivers ed, type of vehicle, distance to school or work, use of vehicle, value of vehicle, no accidents, points

Open peril

Aka all risk or special All perils will be covered unless specifically excluded

A binder

An oral or written agreement that provides temporary evidence of insurance until a policy can be issued

Representation

Answers to questions in an insurance application

Personal Floater Coverages Claims Paid

Appraised items will be paid by agreed value. Others will. E the cheapest of the different ways.

DP2 - broad form

Broad perils

Endorsements and other coverage options of dp3

Building ordinance or law- provides coverage for demolition costs and increased construction costs and broad theft coverage- only available to owner occupant dwellings limited theft coverage-no owner occupant which include $1500 for water craft and trailers, $1500 for trailer not used w water craft $2500 firearms and related equipment

Short rate

Cancellation means you'll recieve a prorated refund minus a penalty

Eligibility requirements (HO2-8, not 4 and 6)

Cannot be occupied by more than four families Mobile homes eligible if endorsement is attached Dwellings under construction, secondary, or seasonal residences are eligible Must be exclusive as a residence

Section 2 additional coverages

Claim expenses- Loss of earnings occurred up to $250 a day for assisting us in investigation of a claim, pre judgement interest, post judgement interest, premium on bonds First aid expenses- first aid to others not the insured Damage to property of others- up to $1000 coverage provided per occurrence by the damage to property caused by uninsured Loss assessments- up to $1000 applies to assessments against the insured

Home owners insurance

Combines property and liability coverage

Law of agency

Contract between the producer and insurance company

Replacement cost value

Cost to replace an item at its preloss condition

Section 1 how limits are calculated

Coverage A primary insured limit for 2,3,5,8 Coverage B one or two families dwelling, 10% of coverage A, 3 or 4 fam dwelling 5% of A Coverage C one or two family 50% of A, 3 fam is 30%, 4 fam is 25% Coverage D 30% of coverage A for 2,3,5 and 10% for HO8

Section 1 property coverage

Coverage A- dwelling, structures attached, materials and supplies for repair of dwelling Coverage B- other structures on premises, 10% of coverage A Coverage C- personal property, 50% of coverage A ( limits are $200 for money, $1500 securities, $1500 for water crafts, $1500 trailers, $2500 property used for buss. purposes, $500 property away from residence used for buss. purposes, $1500 electronic apparatus, $1500 jewelry, $2500 silver, gold, pewter ware, $2500 firearms ) personal property usually located at a residence is covered for up to 10% of or $1000, whichever is greater Coverage D- loss of use. applies of covered loss renders the insured dwelling and inhabitable. Additional living expense, fair rental value, civil authority prohibits use, loss of expense not covered.

Limits of liability

Coverage E- $100,000 per occurrence Coverage f- $1000 per person per occurrence

Section 2 liability coverage

Coverage E- personal liability Coverage F- medical payments to others Both apply to all HO policies

Inland Marine Coverage

Coverage that moves with the property to protect it at different locations.

Section 1 additional coverages

Debris removal (except for fallen trees, only trees w damaged structure or blocking access to driveway, the tree must have fallen due to a covered peril, a maximum of $1000 available for tree debris removal with a max of $500 per tree) Reasonable repairs- Tree, shrubs and other plants- ($500 per each) Fire dep service charge- (up to $500 w no deductibles) Property removed- up to max of 30 days Money fraud- up to $500, no deductible Loss assessment- up to $1000 for loss assessments against insured by association for direct loss to property owned by all members of a covered peril Collapse- for HO-2-HO-6 covers direct physical loss to property, glass or safety glazing material not applied if it's been vacant for more than 60 days Landlords furnishings- HO 2,3,5 insured up to $2500 for household furnishings Ordinance or Law- pays up to 10% of coverage A Grave Markers- insures up to $5000 for damage to grave markers caused by covered peril

Moral hazard results from...

Decision to do something wrong

Coinsurance

Describes a splitting or spreading of risks among the insurance company and the insured

Section 2 conditions

Duties of an injured person- coverage F- injured person will provide insurance co with written proof of claim asap and authorize insurance co to obtain copies of reports and records and submit to physical exam selected by insurance co. Payment of claim- payment by insurance co is not admission of liability Other insurance- Policy period-

Coverage A

Dwelling, building materials and equipment

Part E and F Auto

E-Duties following an Accident or Loss. Meaning insured must follow guidelines to have insurance pay for damages. 1) call insurance company, contact police, move vehicle to safety, obtain copy of accident report F- General Provisions Bankruptcy- if filed during accident insurance company still pays for its responsibilities Changes- written contract takes place over oral agreement if conflict arises. Insurer must issue endorsements. Fraud Legal Action Against Us- no legal action can be brought against the insurance companies until the insured fully complies with all the terms of then Our Right to Recover Payment- subrogation division, meaning the insurance company pays you and then sues the negligent party Policy Territory- US Canada and Puerto Rico Cancellation- insured can cancel at anytime with. Written notice. Insurer can cancel in 10 days if non payment, or suspended drivers license or lied on policy info No renewal- if insurer does not renew they just mail a notice 20 days before Automatic Termination and Other Term Provisions Transfer of your interest in this policy goes to spouse or legal rep until policy period expires Two or more Auto Policies Endorsements Towing and Labor -$25 basic coverage Misc Type Vehicles Extended Non-Owner Coverage for named individuals- usually for use of furnished company vehicle used regularly Named nonowner coverage- designed for individuals who do not own an automobile,but may drive rented or borrowed Joint ownership coverage- individuals in same household other than spouses, non resident relatives. Optional limits transportation expenses coverage 20-600, 30-900, 40-1200, $50-1500

Two types of Flood Insurance

Emergency- initial phase and goes in effect when community applies for insurance until gov finalizes there rates. Building $35,000/ PP $10,000 Regular- Building $250,000/ PP $100,000

Supplementary payments

Extra benefits that include up to 250 for cost of bail bonds, premiums on pill bonds, post judgement interest, up to 200 per day for loss of earnings because of attendance, other reasonable expenses

Coverage D

Fair rental value Reimburses the insured for the fair rental value of the covered property if it becomes uninhabitable from damage by covered peril Payable at 1/12 of the 10% limit of coverage A for each month

NFIP ( national flood insurance program)

Flood coverage for participating communities that meet FEMA guidelines but dies nit exoect assistancd from Federal Disaster Asistance.

section 1 perils insured against

HO-2 provides broad peril coverage for the dwelling, other structures and personal property HO-3 provides open peril coverage for the dwelling and other structures, broad peril for personal property HO-4 provides personal property for tenants HO-5 open peril for dwelling, structures, and personal property (the only HO insuring against mysterious disappearances) HO-6 condo owners form, standard coverage A limit is $1000 and coverage D is 50% of coverage C HO-8 provides coverage for a older home with a replacement value much higher than its current market value, offers basic coverage on dwelling and personal property with extended coverage perils and VM&M coverage.

Coverage table

HO-2- broad perils for ABC HO-3- open perils for AB and broad for C HO-4- broad perils for C HO-5- open perils for ABC HO-6- limited coverage for A and broad for C HO-8- basic perils for ABC

Deductibles

Help minimize frequent claims and eliminate small claims

Loss ratio

Helps an insurer to determine if the business they're righting is profitable

Arbitration

If the insurance company and the insured disagree on whether the insured is legally entitled to recover damages

6 eligible Marine risks

Imports, Exports, domestic shipments, instrumentalities of transportarion or communication, personal property floater risk, commercial prop floater risks

DP2 broad form

Includes all of the basic form perils and extended perils plus damage by burglars, fallen objects, weight of ice snow and sleet, accidental discharge or overflow or water, sudden and accidental tearing apart burning or bulging, freezing, volcanic eruptions, sudden and accidental damage from artificially generated electrical current

Endorsements

Inflation guard endorsement- provides annual increase in coverages a and b Permitted incidental occupancies- overrules exclusions of business activities conducted on premises. With coverage b limited to 10% of coverage a Home day care- up to three children Business pursuits- insureds working from home for their employer Limited fungi, rot, bacteria- used only w HO3 and HO5 Watercraft- extends coverage e and f for liability no rising out of ownership and or use of certain types of watercraft Personal property replacement cost- changes coverage c from ACV to RCV Special coverage- provides open peril coverage to both building and personal Scheduled personal property- allows you to separately give each 9 major categories of valuable property a separate amount of insurance. Personal injury- extends the liability insurance coverage to include legal damages

Aleatory

Insurance policys contract of unequal values unilateral, insurance contracts are one sided because the policy is legally binding on insurance company only

Alien company

Insurer whose home office is located in a different country

Estoppel

Loss of legal defense

DP1 basic form conditions

Loss settlement- covered property losses settled at the lesser cash value or cost of repair/replace Other insurance- if other insurance exists the policy settles losses on a pro rata base

DP2 conditions

Loss settlement- settled on a replacement loss basis up to 80% or more Other insurance- if other insurance exists the policy settles losses on pro rate basis

Loss ratio formula

Losses divided by earned premium = loss ratio

A peril is the cause of...

Losses such as fire, accident, disease, flood, death, and explosion

Coverage F

Medpay- pays all necessary medical and related expenses incurred within three years from date of accident that causes bodily injury to guest on residence premises, payment made without regard to insureds legal liability, funeral services not inculded. Limit of $1000 per person per accident

Insurance

Method for spreading risk of a financial loss among a large number of people

Coverage C exclusions

Money Deeds Gold Silver Animals Aircrafts Motor vehicles Boats Hovercraft Water Graves Credit cards Data

Part A- liability coverage

Name insured & members of their family Anyone using auto with permission Driving car for work purposes

DP3 special form

Offers same coverage as DP2 but is open peril meaning that all direct physical losses are covered unless excluded and personal property is covered on broad peril basis

Combined single limit

One amount of coverage used for either body or property

A binder terminates when...

One issuance of a policy Expiration Cancelation

Occupancy

Only absence of people

Dwelling policies

Only provide property coverage unless endorsed such as rental property and vacation homes

DP3- special form

Open peril for buildings and broad peril for personal property

Uninsured Motorist Property Damage

Optional coverage if you don't have collision. It pays for damages to ur vehicle caused by an at fault owner of an uninsured motor vehicle. Only covers actual cash value or ur vehicle or cost of repair or replace, whichever is less

Part D- Coverage for damage to your auto

Optional unless still making payments on car. (Physical damage or full coverage) Collision- covers auto impact with another auto or object. Other Than Collision OTC- comprehensive coverage that covers all direct and accidental loss not covered by collision coverage like fire, theft, glass breakage, etc When collision and OTC are combined it's open peril. Transportation expense- no deductible for transportation expenses. 24 hour waiting period and 48 hour if due to theft. Max benefit is $20 per day or $600 with no deductible. Part D pays losses at the lesser of actual cash value or the cost to repair or replace the auto. A special limit of $1500 applies for losses to a non owned trailer.

Coverage B

Other structures insures building on the residence separated by a clear space or connected by a fence, utility line, or similar connections, may not be used for commercial or farming. Additional 10% to coverage A amount Does not cover land, business, nontenant dwellings

Exclusions

Part of policy that states what perils are not covered

Underinsured Motorist Coverage

Pays difference between what the insurance will pay and what is owed.

Auto Part B Medical Payments

Pays for injuries received in an accident regardless who is at fault UM payments are for both medical costs and pain and suffering UM is automatically in each personal auto policy

Part C uninsured motorist

Pays insured for BI made by an uninsured motorist, does not pay for damages to the car

Uninsured Motorist

Person that either has no BI liability coverage, does not meet state standards minimum liability requirement, hit and run, invalid insurance

Agent

Person who acts for another person or entity

DP3 other endorsements

Personal liability endorsements- adds medpay Modified loss settlement- changes coverage A and B to replacement value Windstorm or hail percentage- specifies a deductible on a percentage rate Automatic increase in insurance- provides annual increase in coverage A ans B Additional living expense- Tree shrubs and plants- Permitted incidental occupancies- Watercraft-

Coverage C

Personal property The insured chooses the personal property limit and 10% of the limit may be used to cover the insureds personal property whole anywhere in the world

Physical hazard

Physical source that causes chance of a loss

Contract of adhesion

Policy owner agrees to accept terms of policy as offered

Risk

Possibility or chance of a loss

Risk must be...

Predictable laws, chance occurrence, non catastrophic, measurable and definitive, and affordable

Underwriting

Process of classification, rating, and selection of risks

Pro rata

Proportion of total coverage in place for all policies covering the same risk

Coverage E liability

Protects insured from legal liability, bodily injury, property damage to others.

Broad peril policy

Provides a list of all perils in policy

Flat rate

Receive entire premium back

Loss cost

Represents amount insurer should collect to cover expected losses

Five types of risk management

Sharing risks Transfer risks Avoid risks Reduce risks Retain risks

Foreign company

State other than home state where the insurer is admitted to conduct business

Domestic company

State the home office is located

Warranty

Statement garrunteed to be true

The principle of indemnity

States that insurance companies will restore you to the same financial stance you were in before the loss

Cancellation

Ten days for late payment, thirty days for other

Principle

The other person or entity

DP2 Other available coverages

Up to 10% of coverage A under coverage B, debris removal, up to 10% of coverage C, worldwide coverage up to 10% of coverage C, rental value and additional living spaces up to 10% of coverage A in coverage D and E, reasonable repairs, property removed will be covered for 30 days, trees, shrubs and other plants up to $500 for any one, fire dep service charge up to $500, collapse coverage, gLass or safety glazing materials not applied if it's been vacant for 60 days before loss, ordinance or law, up to 10% of coverage A

Personal Articles Floaters

Used for certain types of Inland Marine Policies that are used to insure certain types of moveable property whether or not its in transit. Supplements your homeowners coverage for possessions of higher monetary value. Provides all-risk protection for ur most valuable possessions in the event of loss thru theft, accident or natural disaster.

Dwelling policy eligibility requirements

Used solely for residential purposes, maximum of 5 roofers, building containing four or fewer apartments, townhouse or row house, dwelling building under constructions, dwelling building occupied by owner that has values lower than insurance company minimums, permanently installed mobile home, farm, ranch, orchard, or grove

Reinsurance

When an insurance company transfers some of the risks to another insurance company

Endorsements

Written modification that either adds or deletes one or more provisions of the standard policy

Morale hazard is created when...

Your careless or reckless actions cause a loss

Consideration

Your premium + your statements

ACV

actual cash value computed by subtracting depreciation by the replacement cost

DP1 - basic form

basic perils only extended coverages can be added

DP1 perils

fire Lightning Internal explosion

Watercraft liability exclusion for HO

in storage,

Extended coverages of DP1

when stone or hail, explosion, riot, aircraft, vehicles, smoke, volcanic eruption, vandalism and malicious mischief (VM not for dwellings vacant 60+ days before loss